Navy sealift command contractor gets prison for bribery scheme
By TIM MCGLONE | The (Norfolk) Virginian-Pilot | Published: June 24, 2014
NORFOLK, Va. — As head of a Chesapeake defense contracting firm, Roderic Smith thought he had to "pay to play." He thought bribery was all part of the government contracting game.
"The pattern and amounts of payments were very formulaic and routine," his lawyers said in a court filing. The scheme "was a scheduled system to provide continuous access to compete and win contracts."
Smith would learn that this was not routine, but when he tried to get out, he was extorted by a co-defendant to stay in. It went on for more than eight years before federal authorities stopped it.
Smith, 50, admitted that what he did was wrong and on Monday was sentenced to four years in federal prison.
"I wish I made the right decision so none of us would be here today," Smith said to U.S. District Judge Henry Coke Morgan Jr., as Smith's family looked on.
The scheme began in 2005, shortly after Smith and a business partner, Dwayne Hardman, formed a Chesapeake company called Mid-Atlantic Engineering Technical Services, which specialized in telecommunications work.
The government says Smith and Hardman "masterminded" the bribery scheme when they approached two high-level contracting specialists with the Navy's Military Sealift Command, Kenny Toy and Scott Miserendino, looking for work.
But Smith says Toy was the one who demanded money from him and Hardman in return for contracts from the command.
"Regrettably, we agreed to do it," said Smith, who is from Ebony, near Lake Gaston.
After getting paid, the attorneys said, Toy and Miserendino would tell Hardman and Smith how much to bid on contracts they wanted. Smith's company received $3 million in work as a result. Toy and Miserendino received about $265,000 from Smith, Hardman and others involved, court records say.
Assistant U.S. Attorney Emily Rae Woods said the scheme was "serious and damaging to the integrity of the Navy and the Military Sealift Command."
"That is a substantial amount of money," she said. She sought a five-year prison term.
"Mr. Smith believed he had to make the payments," his attorneys, Cameron Rountree and Robert Samuel Jr., wrote to the judge. "A good man got caught up in a bad decision and lost control."
Smith was involved for more than two years before the guilt became so great he got out, he said. But Hardman, a good friend, went to work for another company and continued making bribe payments.
When Hardman's life began to spin out of control in 2010, he turned to Smith. He said he would go to the authorities if Smith didn't pay him hush money. For the next three years, Hardman was paid $85,000 to keep quiet, Smith and others said.
The FBI became involved last year when another member of the conspiracy reported what had been happening.
Hardman has pleaded guilty to a bribery charge and is awaiting sentencing July 9.
Toy pleaded guilty to accepting a bribe and is scheduled for sentencing July 11. Miserendino's case is set for trial Sept. 30.
Smith has agreed to forfeit $175,000, the amount he contributed to the scheme. He also has lost his company.
"This has been devastating, but I am optimistic," he told the judge.